Posted
by
kdawsonon Tuesday June 23, 2009 @06:29PM
from the litigious-doesn't-begin-to-cover-it dept.

eldavojohn writes "SCO lost last year and began the bankruptcy filings a long time ago but PJ has some speculative bad news on what they retain through the bankruptcy proceedings. SCO proposes to sell a number of assets to an outfit called UnXis, which PJ characterizes this way: 'It starts to hint that this is more a renaming, taking in some new management who seem to have financial expertise, and SCO keeps skipping along as unXis, with the dangerous litigation spun off safely into a litigation troll.' In their filings SCO says they retain 'their litigation and related claims against International Business Machines Corporation, Novell, Inc., AutoZone Corporation, Red Hat and certain Linux users which are not material customers of UnXis (excluding certain large-scale users of Linux servers) that are claimed to have infringed against UNIX copyrights.' So that's still a possibility they could go after anyone who is a 'certain Linux user.' And what's even worse is that they'll retain a patent for running multiple Java applications on a single Java virtual machine. We may not be out of the SCO litigation woods yet."

Microsoft Corp. announced today that they were planning on acquiring SCO for $1985.67. "I believe this is a great opportunity for us to diversify our product portfolio", Steve Ballmer said in a press conference.

Microsoft Corp. announced today that they were planning on acquiring SCO for $1985.67. "I believe this is a great opportunity for us to diversify our product portfolio", Steve Ballmer said in a press conference.

However, the RIAA was filthy rich to begin with. On the other hand, SCO is about as broke as a college student, with no way to get revenue. Really, unless you have a really, really, really, really solid case, you can't gamble with stuff like that unless you have money to burn like the RIAA does.

My understanding was that there was proxy investment going on with SCO - ie: the money behind SCO will keep materializing from somewhere until the large company funneling the cash gets tired of this little game.

I don't know the specifics, but I heard this from a number of usually reliable sources.

This is a bankruptcy proceeding, there are no investments, only purchase of assets that will go to the creditors. There is no plan that they currently have that will fly, as any purchase of any part of the company must be approved by the court, and the creditors. They are trying some shenanigans but in the end, it will be a few more delays so they can suck a bit more money out of the corps. They have not been providing the sec papers either. While they keep struggling, in the end they will just be a small c

SCO attacks large corporations. IBM, for example, can't afford not to fight back. IBM has deep pockets, and a very diversified business. If it was known as an easy target, anybody and their cousin would sue it for the money.

Note: I am an IBM employee, but my job doesn't get me anywhere near legal strategy. This is purely my own opinion, and does not represent IBM in any way, shape or form.

Their latest filing claims they have a single java patent, but other than that, no, this was never about patents. SCO doesn't really have any and certainly didn't claim any when they sued IBM, Novell, Chrysler or anyone else.

They sued IBM over the copyrights to Linux, which they claim they own because they claimed they owned the Unix copyrights. Novell said that they never sold the copyrights to SCO, so SCO sued Novell for saying that.

Since SCO was suing IBM for copyright infringement, that whole thing was put on hold while SCO and Novell fought out who really owned the copyrights.

At trial, all of SCO's claims were tossed out in summary judgement and the like. The court agreed with Novell that SCO had no copyrights to Unix (it never even got to the question of whether or not Linux violates Unix copyrights and their mounds of secret evidence has never been presented anywhere). All that was left were the counterclaims that Novell had against SCO. Among those was the claim that all the money SCO had collected from Sun and Microsoft should rightfully belong to Novell. The judge agreed that SCO was guilty of conversion, which means that it was never SCO's money to begin with.

That part is important: it's not a debt owed to Novell, it was always Novell's money. SCO sold something to Microsoft and Sun that it didn't own. SCO had a right to collect royalties, but it was contractually obligated to give that money to Novell and be paid a percentage back. The court agreed and the only question was "Wow much of what SCO sold was Unix and how much was anything else?"

The only thing left for trial was to figure out just how much money SCO stole from Novell. On the eve of that trial, SCO filed for bankruptcy. Under the law, SCO has a certain period of time where they get to be the first to propose a way out of bankruptcy. They missed every deadline. When the courts had all agreed that their unique opportunity to file a plan had expired, other parties began filing motions.

Among those filing plans were the U.S. Trustee appointed to oversee the bankruptcy. He felt that SCO had no chance to move forward as an ongoing concern and moved to convert from Chapter 11 (reorganization) to Chapter 7 (liquidation). Novell and IBM agreed.

SCO's last move wasn't even the eve before this time. They were late to court, and appeared at the last minute (an hour beyond the last minute, actually) with a so-called "plan" to sell the company. The plan basically amounts to selling all the assets to another company and leaving a shell behind to fight Novell, IBM (and Chrylser and other former SCO-unix customers on the basis that Linux violates the copyrights of Unix). Selling the "business" means, essentially, moving all of "SCO's" money to another company and leaving nothing behind for Novell to collect from at final judgment.

SCO, as I said, showed up late and with only one copy of the agreement for the Trustee, Novell and IBM to see. They objected and asked the judge to move forward with the Chapter 7 conversion motions. They pointed out that SCO was past all legal deadlines. The judge said, and I'm not kidding or exaggerating, "What happens if I don't meet that deadline? Will they take me out back and shoot me?" Thus defying the statues, he gave SCO one more chance and agreed that they will meet in the required 15 days to hear about SCO's plans. The judge ruled that July 16th is 15 days from June 15th...

SCO is really holding out for an appeal. But they'll never turn everything back. And without the copyrights (and probably even with them), they don't have much of a case against IBM (and IBM, like Novell, has counterclaims against SCO). Red Hat is also suing SCO, also on hold for Novell/bankruptcy.

This is just a brief overview and I've skimmed over a lot. But no, patents aren't an issue here. If it were, they'd be in Texas, not Utah (or Delaware now for the bankruptcy).

Very well done, sir!I would tip my hat to you but for two reasons:1. I refuse to wear a hat unless it's a warm one during winter.(it was 100+ F[38+ C.] here in Oklahoma today, so no hat in sight)2. Your User Name lists you as a Colonel, and I only ever made it to Corporal...**twice, and still came out as a Private, First Class[PFC]!

So, I hereby salute you, proper-like, Colonel, sir.

I am curious what comes about with their claimed Java patents, but I am personally getting tired of this circus.Daryl and compa

The ability to provide Linux FUD. It's helped them stay funded so far, if you follow the "Microsoft Partnership" sponsorship that kept them alive, and their interference with IBM and Novell and RedHat have been significant.

They aren't producing new usable products, and their old market niche of rock-solid x86 server class UNIX systems has evaporated in the face of Linux and other, more technically progressive and less lawsuit driven companies.

So what does SCO have other than a few patents that may or may not be invalid, the name, and a whole lot of bad press?

Their thin and questionable patent portfolio is probably a diversion tactic. The takeover of its legitimate operations by the shell corporation unXis is, as PJ concludes, a crass attempt to shelter assets from losses related to litigation, the way a deadbeat tries to avoid child support by selling all his assets into a corporation in the Cayman Islands. It leaves SCO itself to be the little rubber room in which Darl can bounce around his delusional claims. Of course, the devil is in the details, and thou

"... with the dangerous litigation spun off safely into a litigation troll."

Don't count on it. The deal with their lawyers for the lawsuits was, a cut of the winnings if they won, a cut of the company if they lost. They lost. The landsharks inherited big chunks of the bloody corpse. Just imagine them trying to keep from turning the company into a perpetual replay of the last couple years. They'd bust a vein with the effort. I say the company will become the lawyers' hammer for every nail worth suing.

Quite right. They'll run it into the ground by selling off assets and stock to fund their inevitable crash and burn. At which point the lawyers, having bled the coffers dry by their now self-determined fees will simply bail. They don't want to run a software company, they want to collect legal fees.

Sounds like tinfoil tiara time, I know. But why else would they have arranged to get a piece of the pie in the case that the legal tide turned against them, discrediting the company and ruining its value except f

it would be a way too low risk method to move forward for the lawyers. The counter suit was the downside, so it would be a real disservice to allow SCO to drop their obligations/debits to Novell and the other legal agreements they signed, then broke (allegedly), to get these patents in the first place. Then allow some new company to just assume the patents. Not that all laws are fair, but it would be insane to assign any of the patent portfolio to anyone but IBM or Novell, without lugging all the obligati

I'll have a go. Darl McBride will come out of the woodwork and found to be an alien made robot. Now that his identity doesn't need to be hidden, he unleashes a genetically engineered plague that wipes out all of man kind... except for Hans Reiser. Together they forge an alliance and with the weapons taken from the RIAA, they wage a war against Heaven itself.

Hot, blue skinned and white haired alien chicks swarm the globe, locating and mating with geeks with the purpose of creating a new super race of beings. Eventually, this new super race overthrows Darl Vader and the Monopolist Senate.

I'll have a go. Darl McBride will come out of the woodwork and found to be an alien made robot. Now that his identity doesn't need to be hidden, he unleashes a genetically engineered plague that wipes out all of man kind... except for Hans Reiser. Together they forge an alliance and with the weapons taken from the RIAA, they wage a war against Heaven itself.

To be honest we've been worrying about SCO for years now, "the sky is falling" worrying, a couple front page/. articles a month kind of worrying, and to date SCO has won basically nothing, and have done very little actual harm excepting that caused by people worrying about and being scared by them enough to do stupid things they didn't need to do. They've run up some legal bills but they were mostly paid by companies that could afford them like IBM and Novell, and those big companies usually have lawyers sitting around spoiling for a fight anyway.

I'm making a resolution to absolutely stop caring about SCO until they actually win something in a courtroom or do ANYTHING which actually proves to be a real and substantive threat. Everyone constantly worrying about them has done more damage than if we had just yawned, and said "move along, nothing to see here".

That'd be old SCO then, the infamous jerks are new SCO, formerly known as Caldera Linux before they bought old SCO's rights over UNIX and trademarks for their name, hired a complete idiot as CEO and changed their name to SCO while old SCO changed theirs to Tarantella, were later bought by Sun, who were later bought by Oracle.

Wow, I wasn't expecting any real insight to come from my tossed out, slightly bitchy post, but you pulled out some real gold. That HAS to be how that company is referred to from now on. Please, Slashdot, take note of this young man and his comment full of genius. This company must be called Unctuous from now on.

Needless to say its an anagram of Unix, presumably a play on Un-Unix. Whomever owns the Unix trademark should suit them!!!... Can you sue for anagrams of trademarks? SCO doesn't own the Unix trademark do they, I lost track?

A lot of issues and claims have already been resolved in prior cases. A thorough analysis of the risk of future SCO-Spawn-Litigation depends upon the preclusive effect of those cases. In other words, SCO's children don't get to relitigate things that SCO has already litigated (and lost) once.

The instant discussion isn't very informative because it appears to omit a thorough discussion of the effect of SCO's previous defeats on SCO's children's future prospects.

the problem is "Toxic Assets"Unless somehow a Judge actually waves off on this "plan" if you buy the company

1 You get the lawsuits and liabilities (hint you would have to pay Novell their money)2 the current assets are not worth all that much3 you encourage some other company to try the same thing

Right now IBM does not care about the money they want TSCOG dead and dust Novell would like to see some money from this but they really don't care about the amount as such (they already have paper for pennies on th

Here's the part that surprised me in all this... "Most of the current SCO staff, including developers, support personnel, sales and marketing are expected to join unXis."They still have developers? And marketing staff? Beyond the guy writing the BS on their website?

SCO was a respectable Unix company once, "first UNIX company" according to Eric Raymond. They also were Caldera which may have never been the biggest player in Linux distros but was certainly an interesting one and not a bad Desktop environ

It looks like a unxis.com is currently one of those "this domain might be for sale" pages. Minimum bid is $60, don't know what it would take to get them to actually sell if someone wants to get it before SCO does!